tv The Willis Report FOX Business January 2, 2013 9:00pm-10:00pm EST
years. forgetting we're dancing on their own graves oblivious even the face of death of politicians could not have the courage to slow the slide into entitlement oblivion. only hours after parting it makes me want to crawl back into bet and vomit. but not necessarily in that order. tomorrow we have one economic adviser martin feldstein in the middle of deals that cut taxes and increase spending. there is another side he will tell us. there was a balance that favored even cuts to the spending hikes and at best, more spending cuts to the hikes.
that was then. not at all now. tomorrow.l why? because the scal cliff deal which will be signed by the president probably moments from now will shrink the government. no. spending rises by 4 trillion. maybe investors were excited about lower deficits. no again. deficits continued to climb to 8 trillion of the decade. the estimated deficit reduction, just 650 billion. and oh, by the way, contrary to what you heard, the middle class gets socked with a tax hike. you earn 50,000, get ready to pay additional thousands of
assam. here with details, scott hodge, president of the tax foundation. thank you for coming in. let's get into the details of this behemoths, a huge bill starting with the average tax increases that people are going to face here. if you're maing 50,000, 75,000, as i said, 822 will be your increased tax, what you will owe, and it just keeps going. >> well, that's exactly right. that, the tax increases in the middle class will come from the exploration of the temporary reduction in apparel tax which was reduced, as you know, 2 percent. that goes away, and so our payroll taxes will go up. the average taxpayer will see n increase of the thousand dollars gerri: is circles within circles. we talk about the bush income taxes expiring. you're not talking about the paoll tax, social security income tax. we put that in place. it was stimulus.
this wil really catch the middle-class. here is the number that really drove all this home. 77ercent of americans will now face higher federal taxes in 2013. what happened to that promise that we were only going to hit the height of the upper class and a really wealthy peple? >> well, the wealthy will see a permanent tax increase thanks to the increase in the top rate from 35%-396%. and for millionaires that is going to be an average tax increase of well over 150,000 per ear. certainly the bulk of this tax inease will go to upper income people. it starts and a lower level around 200-250000 a year in income. we will see some of their deductions and exemptions bgin to phaseut, but he real tax increase will hit those earning over 400-$0,000 per year, hit with those higher tax rates. gerri: layers upon layers of taxes, not just payroll, also
obamacare taxes. the list goes on. ultimately you sa and 'you because you are some knowledgeable about this, you say that it's a b deal for the economy. >> welcome made really is. because while we were spare from going over the fiscal cliff, our economic model shows that this is a ruced economic growth by one and a half% over the next in years which means that that tax bill will actually raise less than what is actually being predicted. , one-third less. will we see is that for every dollar of tax revenues it actually reduces economic growth but a dollars and $0.50. at think that's a real bad deal for the economy. gerri: unbelievable. that is a bad deal. the uc anything that you like? >> well, there are good things. we can quit talking about the temporary busax cuts. this means that we are talking
about the obama tax code. president obama of this tax cut right now. this is all his. for now on, good or bad, he lows with the results of this. gerri: you are so knowledgeable. thank you for helping is out. it is a huge bill. of course, the president will be signing it soon. thank you for your time. >> you bet. gerri: washington's last-minute deal to avert a monster they created has left neither side coming victory, everybody seems to be mad. now moody's is warning, their compromise does not go far ough to protect our country's aaa rating and is urging congress to do more. with more on this, democratic strategist, diector of communications for american crossroads and ed rollins, republican strategist and fox news contributor. i'm going to start with you. you have the most experience with these kinds of things. moody's has already saying, ready warni, already sending a
blank saying we're not where we need to be. what do you make of this? >> it's a disaster. you have not only raise taxes on the more well-to-do but basically handicapped yourself. try and raise more revenue. as the grippy have to go again and there is always a net loss you take a couple hundred thousand away from someone making a million. it has also split the republican party. clearly put in the speakership in jeopar. all they're looking for is a horse. pro the have the votes to dump him. that is a terrible place to begin. you still have not got 1 penny from the deficit. gerri: you like this deal. i have to tell you, a lot of your friends on the left don't. what you think it's good? >> that might be one of the reasons. the left is not love it. when you look at his to the first time in 20 years we raised taxes, cut the deficit, and the doe was not even close.
unlike 20 years ago it passed by one vote in the house and al gore had to pass the vote in the senate. the political landscape has shifted out of the feed of the republicans, and they start to em to know that. they still can't find their footing on any of it, and the warning is afternoon, the first shot across the bal, especially to the repblican house not to play games with this next set of talks because that is whre the rest of the jobs have to get done. step two ofhree steps. the third will be the hardest. >> it is not want to negotiate on that. back to the deficit for a second. here is of europe looking at projected total deficits of the next decade, all we did with this deal, kick the can down the road a little bit. 650 billion in at the -- estimad deficit reduction must not go far enough. it is marry and have a right? >> well, it is not the best policy in th world except for when compared to all the other policies they were considering,
so there were on the brink of actually raising everybody's taxes by a far greater amount which would have harmed the economy much more. so there is that. it's not as bad as it cut a ban. the one thing, it kind of reminds us why we're havng the stock. it has been lost. the fiscal cliff was the result of all of the debt that we had been piling up and the tx increase on higher earners which does not fix that. they have to go after entitlements. that is where the rubber is really going to hit the road. gerri: can i tell you something that drives me of the fiscal cliff when i here all these details. foevery dollar in spending cuts we got in this deal we got $41 in taxes. 1-41, not 1-1, 1-2, 1-3. how is ths sanity? >> it's not. basically have 122 some odd page built the people have three minutes to red. we should not be doing our
government last-minute like this. they put the gun to their own head. the bottom line i, they could have kicked it down. that the new congress deal with this, taken the time to do this appropriately. that promise you dealing with the congress, you're going to have a hard time getting anything done that will reduce the deficit. i would expect my fellow colleagues hee on the show, wait for the president to submit his entitlement reform program and see how many democratic votes in bipartisanship there is to that. gerri: speak to that? >> well, that is one of the smartest guys out there. politically he has a lot of good points among but here is what will happen. the president is going to have to reform entitlements, and you will. he will close loopholes. he will make investments. gerri: he backed away from that at every turn. >> campaigned on it. so far at the end of the last turn, beginning of this one, he kept his campaign promises.
the one he made a mistake was banner. he had a better deal at the table last time and then he walked away. he actually, the house republicans make the nhl negotiations look good. if the keeper of the will be just as irrelevant. gerri: to marry and have it right? does the president keep his campaign promises? getting maybe not. >> she did it all. between romney he said no tax increases and obama who said $3 in spending cuts for everyone in tax increases. the next step is to trillion dollars from obama that he needs to propose on spending cuts. that's one of the reasons it went down to the very last minute, one of the reasons that had to go to the senate because democrats did not impose gentlemen refrms. it's all moving to the conclusion. gerri: it's not something they are long gone. i have to tell you. of watched for a long time. they seem to be more interested in paying off friends and cronies and anything else.
>> the only when there was joe biden. gerri: that's really true. >> i think the presient and democrats, all of them really will the republicans, at thing that's hard to argue. >> i would totally agree. gerri: tt is pretty strong stuff. well, stick around. are coming back after the break in the last you all about the next chaptein the soap opera that is washington d.c. stay with us.
the debt ceiling, i want to show you the breakdown of the vote on the fiscal liff. among the leaders, this is interesting, the speaker, unusual. he voted yes on that bill. normally does not float. eric cantor voted no. paul ryan voted yes. what does that tell you? >> there is a split the republican party into a certain extent, biden is a big beneficiary. the speaker is the person who lost the game now proven that you cannot produce the caucus. there is no power unless it can produce. the majority voted against. gerri: h said the democrats rode the republicans. what will be the result? >> i think will see. whether he is reelected as speake he probably does. if it was by design, they were trying to give everyone cover. if it was by defalt than they have a lot more problems than
you think. it just strengthens the president's hand going into this next set of negotiations worry not only has public opinion that the business community who oppose him to the nail in his reelection but supported the in this effort and will support him as the republicans t to shut down the deficit or stop from paying the bills. gerri: everything i heard about this plan has been negative. people don't like it, don't want higher taxes on the wealthy and think it onstrains small business and reduces hiring. the basic economics of it, forget about the politics. the basic economic system work. how do you think that the private sector is in support? >> obviously was to spoke loud and clear, tlling and at the top of the segment. all other business leaders went to the white house,met the president, went and met with republicans until about the concerns. a lot of business leaders who are now with president obama coming to the white house, then going to meet with republicans on the hill trying to persuade them to do the reasonable thing.
in the end they did. the question is, well they now like to hear pat st., were going to shut down the government cannot and pay our bills. gerri: wait a minute. i get there in a minute. i think you're going to see this rally in the stock market come crashing to a halt. to you, i found this interesting from a grover. the bushax cuts collapsed at midnight. every voe for the senate bill is cutting taxes and eeping his or her pledge. now, coming from grover i think this is just a little bit surprising. what do you say? >> i think are overeating into this whole supposes split between republicans, the ones who voted yes in the once you voted no. they were dealt a bad hand, and there were a lot of different opinions among the members on how a play that. you end up with 150 planning one way and the rest plenty of weight. i don't think of a sudden their is a shift in the republican
party will support tax increases this is unlike 1990 where half the republican caucus voted for new tax increases that did not already exist. taxes are going up, trying to find a way to mitigate the damages as much as possible. i think a lot of the guy's head back to the locker rooms, each other on the back and say, well, you know, you have your opinion and i have mine. now they see what the next battle is and that's on spending gerri: exactly. to you, marion was just saying we get to this debt ceiling republicans are saying thisis our going to get spending cuts. is that a strategy that works? >> is what we have tried twice before. we really want to basically anti as the american public more than they are today to all you have deduced that this government down. they had to come up with a significant alternative, unify parties, the majority of their own members voting in one way or the other. my argument is it's not a slap on the back. they lost the moral high ground,
the one significant issue that they have always been consistent on. that's basically taxes. they threw them away. gerri: jonathan, your forecast on what happens with the debt ceiling. you brought it up. what do you see happeng? >> i disagree. i think this is a special case on taxes. it was historically unprecedented. you have these tax increases that expired. a very different case in 1990 or '83 when they passed tax increases. at the co-ceo of unity among the republicans when they go to the president and say when he began spending. let's see what you have. the president will go back and say, we already cut spending two years ago. moody's will say, you don't count that. new spending cuts. gerri: there's no everaged. >> except for the debt limit. there will be allowed to go back and say we need because spending. at the debt provides -- it's a shame that moody's did not make that announcement back in december because you would have seen more movement on the side
of the democrats to give a little bit more. gerri: running the government, and i'm still stuck on the ratio. $41 in taxes for every dollar in spending cuts. it's just not right. thanks to my panel, terrific panel. marion, jonathan, at. thank you now we want to know what you think. are america's best yearr behind us log on to gerriwillis.com, vote on the right hand side of the screen. all share the results of the end of the show. more coming a bit this hour. my breakdown othe fiscal cliff as something it for everybody from tax breaks for hollywood to the extension of $12 billion in wind power tax credit. why this deal does everything but solve our problem. don't go away. ♪
♪ gerri: well you were out enjoying your new year's eve with friends and family, congress had their eye on your wallet. not only did they pass the biggest tax hike in 20 years, they also filled thebill with so much pork may have to start calling at the farm bill. that's right. the deal to raise taxes on families earning $450,000 or more is also full of special guineas for legislators on both sides of the aisle. the hollywood break,
$430 million extension of tax rules that helped found and television production. boy, does hollywood need that. the elite pay for that with extensive campaign contributions . another entertainment industry break and a 70 million for car racing, especially mother had to bud raceways. sorry, mean, an extension of the seven year cost recovery for motorsports facilities. nascar was profible. then this from the land of great energy. 4 million in tax credits for two and three real electric vehicles something tells me this is not an effort to get act of card in every garaged. maybe a segue. is anyone uses anymore? seriously, the money is for plug-in motorbikes. credits were extended for energy-efficient appliances. by a diesel and renewable diesel. there is a $59 million credit for algae growers. tax credits to encourage the
production of cellulose biofuel. you know what, it's good whe they came plexor industry. then there is tax-exempt financing for what is called the new york liberty zone, the area around the world trade center. goldman, ceo white blank fein says thank you very much for the special benefits. i guess that makes up for the smaller bonus pool. the list goes on and on, and there is a railroad operators, 2,202,000,000. unbelievable. here we are flirting with greek style public finances, and ngress continues to line the pockets of their friends and family. i don't knowbout you, but there is some old acquaintances i would like to forget. coming up, more fiscal fallout from the fiscal cliff fght. the markets seem to love it. my next guest is fired up over some of the port. why he thinks the wind energy tax breaks are a disaster and what the real focus of our energy policy should be. stay wwth us. ♪
>> from fox business studios in new york, here again is gerri willis. gerri: green energy turned out to be a big winner in he fiscal cliff bell. more investment, we can't afford until today. rubber, welcome back to the show. we ave $12 billion in tax credits over 10 years grateful we get back? >> gerri, the wind energy advocates push to get their tax
cuts extended great isn't it was not extended, there would be about 37,000 jobs lost. well, he figured this is a 12 million-dollar price tag, we are talking about $329,000 per job. it's an absurd number the one you might write a check and send it out to those people instead of bothering with the wind energy. here is a number that astonishes me. 84% of the infrastructure, wind energy infrastructure, what are you talking about? that is crazy. >> it does not produce electricity when demand the highest. you can look here in texas where there is more wind energy capacity than any other state. 8.7% of the installed wind energy capacity as reliable.
when demand is the highest, electricity prices are the highest, this is useless infrastructure when it comes to keep demand times. he wants the white house and epa wants to pay for it. expensive. it doesn't work well. why are we even bothering? why don't we let the private sector do it? if it's such a great deal, why do we let them do it? >> i think that you ran down some of these issues in the previous segment when you talked abouthis fiscal cliff bill being a prime example of spending for congress. you have an exteion of the tax credit for three wheeled electric vehicles i haven't seen any like that. this is another example of congress trying to pick winners in the energy sector and, unfortunately for this
administration, they have this fixation on a lot of energy sources. gerri: don't forget about the algae. [lghter] i think that's going to work? the winner by? i mean, professors and some of skewer cool somewhere. >> the sutance of algae has shown some promise. if you can use photosynthesis to produce it on a large scale, maybe it works. one that sticks is the cellulosic ethanol provision. heres an industry that has never produced any sizable quantities of ethanol at market prices, yet they get an extension of the tax credit. the amount of land that would be needed to make it work just boggles my mind. it doesn't work. it can't work. and yet they got an extension of
the tax crits and in this bill. it is another bad example. gerri: let's talk about something that does work. apparently the coal industry is going great ns and other parts of the world, but not very. >> is a remarkable story. i appreciate you bringing it up. if you look at what is happening, u.s. coal consumption is declining rapidly. but what is happening globally, if you look at the report that came out of the iea just last month, they are looking at and reporting on booming global coal production and consumption. over the next five years, it will increase by as much as the u.s. and russia combined. so of this fixation here in the u.s., we are patting ourselves on the back for wind and the other things. global omissions are soaring because of the coal consumption globally, which is part of a
demand. gerri: there is a positive energy stored in the united states. it has everything to do with natural gas. that is the future. and that we were going right now i'm. >> the u.s. now, whether its oil and natural gas, both are incredibly positive stories. the utica shale in ohio, the voc and shale in pennsylvania. the barnett here in new york. they are incredibly positive. we can count on the sierra club to oppose this especially now thanks to matt damon and his new promised land movie. the onehing you for coming on the show. it's always a pleasure to have you. we will do some movie reviews next time. thank you so much for an honest day in 1879, thomas edison bega
instruction of his first electricity generator. he originally eated the generators to power his other new invention, like all. electricity was so new back then, edison h to build everything, not just the generator. he built the cables right down to the lamp holder switches and sockets. electricity sure wasn't going to be free. but he did create a large-scale electricity grid. and eventually, it was replaced by the inventions of tesla, who worked for edison is a young apprentice. it began with thomas edison on thisay in business, january 2 from 134 years ago today. when we come back so i will get
have a great weekend. meanwhile as businesses plan for the rest of 2013 aristos shortage of a successful product launches 2012. and some companies could not get a right to. the biggest product flopped of last year. number five. debuting with just $100 it did not live up to the type. number for. the sony tablet with the ability to folded half. sales were worse and it is discontinued. that animated film "john carter." just about broke even on the budget. the dodge dart never good twin it is not recommended from "consumer reports". the biggest flop?
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gerri: speaker john boehner is under fire after delaying action on a bill for hurricane sandy relief aid. >> we cannot and should not wait. we must not walk away. this is a disaster of a disaster. >> this is an absolute disgrace. speakers should hang his head in shame. gerri: john boehner and others criticized the bill, rightly so, for being loaded with work choices, like the $150,000 allocated for alaskan fisheries. the houses that developed have developed this friday on a down payment of $9 billion for disaster aid. another bogus set, january 15 for the remaining $51 billion.
on monday i had a business. on tuesday morning i was repaired tuesday morning i was repaired overnight. when i got there, i have nothing left >> last month we told you about small buiness owner diana petrone, whose staten island store was wiped out by hricane sandy. exactly one month ago, she had nothing great but now she's back up and running. we just heard from her, and she's joining us now on the phone from her store. great to have you with us and thk you for joining us. tell us what is happening? how did you open your doors? >> we opened on friday and it happened with sheer determinatioand hard work. i'm so proud to say that we are open. we are back up and running. gerri: that is great news. you have released under bunch and struggle, and we are showing pictures
of that. >> the past two months have been mind blowing. i n't believe we got through it like we did. again, we are back in one was there ever a point he thought we would not make it? i will have to close down in a. >> i am not going to lie. i didn't thi that to myself. who would not think that? but i am a strong person and i'm a fighter. and i'm grounded by love and determination with everybody in my life that we never gave up. it was never an option. gerri: what i think is so great about your story, and now we see pictures of your store is that you didn't take government money. >> that's ight, nothing. everything you see, 99% of it was done ourselves. we were here every day since the
store closed. sometimes work into one or 2:00 o'clock in the morning, no heat up until two days before we opened our doors. we did as much as we could ourselves. everything was with our own money at this point. gerri: did your employees pension? >> yes, our employees have been amazing. every one of them came back. they are all here working. we have the same team. like i said, we are a family and do this together. gerri: here you are, a small businessperson. you can recover from a storm as big as hurricane sandy in only two months. yet when you look at the bigger problems this country faces, it just takes so much more time watching to get around to a solution. tell me what you think. the private sector solution seems to be better? >> it is roll up your sleeves and dive into it. and around and talk about it. you can stand around and ponder
it. but the real issue is to get things done to make it happen. jump in and just do it. it is frustrating when you hear people going back and forth. they are fighting over issues and small things. you know what, it's not going to solve the problem. people need immediate assistance. they need government officials to get down and dirty into it. understanding what people are going through and not just see it on tv and come down and shake some payments. maybe some of the people, the private sector needs to be more involved in the government and show them how to get it done. gerri: diana, what you're saying is so awesome. roll up your sleeves. i then. get it done. >> i would like to shout out to my meeting customers who supported us and i have been gettg hugs and kisses since friday they are so grateful. what are store represented --
people couldn't imagine us coming back. we came back bigger and better and stronger and so quickly -- he gave everyone hope. it doesn't matter how bad it is, it will be better. we give people hope that we can do it, coming from what we went through, they could do it, too. like i told every customer that comes to my door, we are here to help you now. cherish today entry tomorrow. live today. it will be fine. gerri: your message is just great. i really appreciate your coming on to the show and talking with us. good luck to you and congratulations. we are all cheering you on. >> come down and say hello. gei: have a great one and good luck. that was just awesome. i will be back my "two cen more" and the question of the day. day. are america's best years behind this is $100,000.
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the. ♪ gerri: there is a new gallup poll that shows half of the country feels that our best years are behind us in this country. you agree or are you weary and wary? here is what some of your posting on my facebook page. with the current leaders in the entitlement mentality, it could be unless we see another ronald reagan or even a bill clinton. we have lost not on our financial compass, but our moral compass. i don't hold a lot of hope right now. way behind, and they're not closer than they appear in the rearview mirror. my goodness. come on. we just talked to diana petronas, very optimistic about the future. we asked on gerriwillis.com. 84 percent of use of america's best years behind us. i cannot sign-on. this is where we part company. be sure to log on to gerriwillis.com from my question every we t